Tag: Economics

The increase in online banking has led to a reduction in the demand for counter staff in high street bank branches.

Which of the following types of unemployment is this most likely to have caused?

Select ONE answer:

1. Cyclical
2. Frictional
3. Seasonal
4. Structural

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

1. This would have been caused by a decline in aggregate demand.
2. This arises when workers are in between jobs.
3. This occurs when workers are unemployed at certain times of the year.
4. Correct: This is caused by a change in the technology used in the industry – a change in supply conditions.

 

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The table shows the amount of direct tax paid by individuals at different levels of income in a country in the eurozone.

Which of the following statements about the country’s direct tax system is true?

Select ONE answer:

1. The system is progressive throughout the income range
2. The system is proportional from €10 000 to €20 000 only
3. The system is proportional throughout the income range
4. The system is regressive from between €20 000 and €30 000

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

1. Tax does indeed rise as income rises but this does not define a progressive system.
2. Correct: The proportion of income taxed remains at ten percent.
3. It is indeed proportional in the 10–20,000 range but not thereafter.
4. Regressive means a lower proportion of tax as income rises. Here it is higher.

 

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The table below shows the rate of interest in four countries in 2017 and 2018.

Which of the following would best explain the possible aims of the changes in monetary policy that occurred between 2017 and 2018?

Select ONE answer:

1. Country A was trying to discourage consumer spending / Country B was trying to encourage domestic saving
2. Country B was trying to encourage consumer spending / Country C was trying to encourage investment by firms
3. Country C was trying to encourage consumer spending / Country D was trying to discourage domestic saving
4. Country C was trying to discourage short term capital inflows / Country D was trying to encourage more exports

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

1. Although an increase in the interest rate should discourage consumer spending in Country A, a decrease in the interest rate in Country B should reduce the incentive to save.
2. Correct: A reduction in the interest rate in Country B should lead to increased consumer spending and a reduction in the interest rate should also be an incentive for firms to borrow and invest in their businesses.
3. Although a reduction in the interest rate should lead to an increase in consumer spending in Country C, the increase in interest rate in Country D should encourage more foreigners to save in that country.
4. Although Country C may have reduced their interest rate to make saving in their country less attractive for foreigners, an increase in the interest rate in Country D should actually lead to more demand for their currency, making their exports less competitive abroad.

 

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Which of the following is an example of fiscal policy?

Select ONE answer:

1. A change in the exchange rate
2. A change in the level of government spending
3. A change in the rate of interest
4. A change in the money supply

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

1. A monetary policy measure
2. Correct: Government spending is one of the two fiscal policy measures.
3. A monetary policy measure.
4. A monetary policy measure.

 

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The diagram below shows three supply curves (labelled S) and three demand curves (labelled D) for the pound sterling (£). The price of sterling is quoted in US$. The original equilibrium is at point X.

There is now a recession in the USA. At the same time, the UK is experiencing a consumer boom.

Which point A, B, C or D will represent the new equilibrium in the market for the pound sterling?

Select ONE answer:

1. A
2. B
3. C
4. D

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

1. This shows a decrease in supply and a decrease in demand for pounds sterling.
2. Correct: A recession in the USA will reduce demand for UK exports and so the demand for pounds sterling. A consumer boom will increase demand for US imports and to purchase these the supply of pounds sterling will increase.
3. This shows a decrease in supply and an increase in demand for pounds sterling.
4. This shows an increase in supply but also an increase in demand for pounds sterling.

 

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How would a fall in the price level be shown on an aggregate demand (AD) diagram?

Select ONE answer:

1. A movement down the AD curve
2. A movement up the AD curve
3. A shift to the left of the AD curve
4. A shift to the right of the AD curve

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

1. Correct: demonstrates the correct relationship.
2. Would be caused by a rise in the price level.
3. Would be caused by a change in components of aggregate demand.
4. Would be caused by a change in components of aggregate demand.

 

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Which of the following must occur as a result of deflation?

Select ONE answer:

1. A rise in the value of money
2. A fall in savings
3. A rise in employment
4. A fall in the current account deficit

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

1. Correct: Will occur
2. Not necessarily occur
3. Not necessarily occur
4. Not necessarily occur

 

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